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Are the sales of Season Ticket's sufficient to keep Charlton Athletic FC profitable, and how might they increase their total revenue?

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Introduction

Gary Leader Economics Coursework Question: Are the sales of Season Ticket's sufficient to keep Charlton Athletic FC profitable, and how might they increase their total revenue? Introduction Question: Are the sales of Season Tickets sufficient to keep Charlton Athletic FC profitable, and how might they increase their total revenue? This is the question that I have decided to answer in my coursework. I will be looking at how Charlton Athletic is able to remain successful and still keep on generating profits (total revenue - total costs = total profits). In some cases these profits will have effects on the consumer, which in this case is the fans at the club. I will have to look at whether a rise in season ticket prices will have an effect on the number of fans still willing to buy them at the new higher price. Also I will be looking at ways in which Charlton are able to maximise their revenue to enable maximum amounts of profit to enable them to be even more successful. I will also have a look at what other sources of profit there are, for example, TV Coverage, Advertising and merchandising, aswell as other generative sources of profit. I will come to a conclusion at the end of the coursework assignment as to whether my question is true. ...read more.

Middle

However, in order to have a successful advertising campaign you need to make sure your advertisement is eye-catching or it will go unnoticed, meaning that you have just wasted a lot of money. The new John Smith's advert is an extremely good example of good advertising. Comprising of three extremely skilful players and then your local beer bellied football crazy mate from down the pub. It shows of talent and then the 'geezer' kicks the ball miles and quotes 'ave it', this I know has become a popular saying amongst my mates, and I find this advert humorous and eye-catching. It has also achieved the desired objective in generating more sales of John Smith's. Charlton have advertised on a much smaller scale on local radio stations and in local newspapers. However there advertisement campaigns have been successful and they to have managed to achieve what they initially set out to do. They now fill a 26,650 capacity all seater stadium most weeks whilst consistently achieve crowds of well over 25,000. They have been able to raise the capacity from 19,000 to 26,650 and fill it just through advertising and this is an extremely hard task for a small club like Charlton, whereas at the likes of Chelsea, Arsenal and Manchester United there are waiting lists aslong as 5 years in progress. ...read more.

Conclusion

Cross Elasticity of Demand Cross elasticity of demand is found by dividing a percentage change in the demand for a good by the percentage change in price of a different good. However it only works if the person buying the tickets is a fan of neither club. It should determine what club is more likely to attract neutrals to come and watch. It can be used to determine whether a substitute such as Millwall would have a greater demand for tickets. Cross Elasticity of Demand = % change in the demand for a good % change in the price of a different good Millwall could be considered as a substitute to Charlton from a neutrals point of view however this could be unfair as the two clubs are in different leagues to one another, so although the cross elasticity of demand for a Millwall ticket will come out lower than Charlton's there are other decisive factors. I will show cross elasticity of demand by using Tottenham Hotspur, they are both in london and are not title challenging and have world-class players. If the cross elasticity of demand for Charlton was 3 and the price of a Tottenham ticket rose by 5% then there would be a 15% increase in demand for a Charlton ticket, therefore Charlton would attract 15% more fans to the Valley and generate more income from fans who might have been elsewhere had Charlton not offered lower ticket prices than Tottenham. ...read more.

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